Modern economies need a functioning financial system. In principle, the financial system has four main functions: providing a payment system, matching borrowers and lenders, enabling people to manage their personal finances across their lifetimes and between generations, and sharing and managing risk.

So is the financial system fit for the future? Will its current structure allow it to fulfill its main functions? Do we need further structural changes? If so, what kind of changes? Are tighter banking regulation, an increasing role for shadow banking and the EU’s project of establishing a capital markets union the way to go? What opportunities and potential risks do such changes involve? How will technological developments like fintech and digital money shape the future financial System?

Within the Framework of the 44th Economics conference of the OeNB, John Kay is talking about if we do have too much intermediation.